Economy

US: Business borrowing for equipment rises 9% in July - ELFA. Borrowings by US companies for capital investments rose 9% in July from a year earlier, the Equipment Leasing and Finance Association (ELFA) said. The companies signed up for USD9.9bn in new loans, leases and lines of credit last month, up from USD9.1bn a year earlier. (Reuters)

US: Existing home sales climb for second straight month in July. US existing home sales increased for the second consecutive month in July as inventories improved moderately, while prices eased from the prior month’s record level. Existing home sales increased 2.0% to a seasonally adjusted annual rate of 5.99m units last month from June’s upwardly revised pace of 5.87m units, the National Association of Realtors said. (Reuters)

EU: Business boom roared on in August - PMI. Business activity in the eurozone grew strongly this month, only dipping from July's twodecade high monthly pace, as a rapid COVID-19 vaccination drive allowed more firms to reopen and customers to venture out. Without ongoing supply chain disruptions, activity could have expanded faster. IHS Markit's Flash Composite Purchasing Managers' Index, seen as a guide to economic health, fell to 59.5 in August from 60.2 last month. (Reuters)

EU: Consumer confidence weakens for second month. Euro area consumer confidence weakened for a second straight month in August, preliminary data from the European Commission showed. The consumer confidence index dropped to -5.3 from -4.4 in July. Economists had forecast a score of -5.0. In June, the reading was - 3.3. The confidence index for the EU shed 0.7 points to reach -6.3 in August. The survey data was collected from August 1 to 22. Final figures are set to release along with the results of the monthly economic sentiment survey on August 30. (RTT)

EU: German private sector continues to expand. The German economy continued to grow strongly in Aug despite further constraints on manufacturing production, flash survey results from IHS Markit showed. The composite output index dropped to 60.6 from 62.4 in July. The score was forecast to fall to 62.2. By sector, services activity grew at a sharp rate that was only just shy of July's peak. On the other hand, manufacturing showed a more notable loss of momentum. The services Purchasing Manager' Index fell to 61.5 from 61.8 in July, but the score was above economists' expectations of 61.0. (RTT)

UK: Private sector growth at 6-month low. The UK private sector growth eased sharply in Aug largely due to staff shortages and supply chain issues, flash survey results from IHS Markit and the Chartered Institute of Procurement & Supply showed. The flash composite output index decreased to a six-month low of 55.3 in Aug from 59.2 in July. The score was forecast to drop to 58.4. Weaker recoveries were seen in both the manufacturing and service sectors. The services Purchasing Managers' Index fell to 55.5 from 59.6 in July. The expected level was 59.0. The manufacturing PMI came in at a fivemonth low of 60.1. (RTT)

UK: Factories report worst shortage of stocks on record - CBI. British manufacturers reported the worst stock shortages on record, caused in large part by a post-lockdown lack of components for the electronics industry and in plastics, according to a survey published. The Confederation of British Industry’s index for stock adequacy fell to the lowest since the survey began in 1977, sinking to -14 from July’s - 11, the third record low in as many months. (Reuters)

Japan: Private-sector activity hit by COVID-19 surge - PMI. Japan’s factory activity growth slowed in Aug, while that of the services sector shrank at the fastest pace since May last year, highlighting the increasingly heavy toll a recent wave of COVID-19 infections is taking on the economy. Manufacturers mostly withstood the impact of the coronavirus resurgence, due largely to the highly contagious Delta variant. (Reuters)

Singapore: Inflation increases in July. Singapore's consumer prices increased marginally in July, data from the Monetary Authority of Singapore and the Ministry of Trade and Industry showed. The consumer price index rose 2.5% YoY in July, following a 2.4% increase in June. This was in line with economists' expectation. This latest consumer prices outcome was largely due to a rise in prices for core inflation and accommodation cost. (RTT)

Markets

Tenaga (Outperform, TP: RM12.42): Signs solar power purchase agreement with Sharp Ventures. Tenaga Nasional Bhd (TNB) has signed a large-scale solar photovoltaic (LSS) power purchase agreement (PPA) with Sharp Ventures Solar SB. The utility giant said Sharp Ventures Solar would design, construct, own, operate and maintain a solar photovoltaic energy generating facility with the approved capacity of 50 megawatt alternating current in Klang, Selangor. (Bernama)

Serba Dinamik (Neutral, TP: RM0.44): Takes legal action against KLSE Screener. Serba Dinamik Holdings along with group MB and CEO Datuk Dr Mohd Abdul Karim Abdullah, has begun legal action against the owner and operator of KLSE Screener. They have obtained an ad interim injunction over the alleged publication of false and defamatory comments posted by a user account impersonating the group’s CEO. (StarBiz)

Tuju Setia: Tenders for RM3.8bn construction projects. Tuju Setia is tendering for RM3.8bn worth of projects mainly to construct high-rise buildings, as well as to design and construct hospitals. MD Wee Eng Kong said that in the past two months, the group had been invited by established property players to submit tenders for residential and non-residential high-rise projects. (Bernama)

AwanBiru Technology: Sells loss-making O&G training outfit. AwanBiru Technology has disposed of its 51% stake in Prestariang O&G SB (POGSB) to its JV partner MIE Corporate Holdings SB as part of the technology and talent company’s rationalisation plan to discontinue non-profitable operations. AwanBiru Technology has entered into a sale and purchase agreement with MIE for the disposal for RM113,213, the proceeds of which will be used by AwanBiru Technology for working capital. (The Edge)

Gadang: Sells land in Taman Melawati for RM43m for debt repayment, working capital. Gadang Holdings is selling a parcel of residential land located in Jalan Kolam Air, Taman Melawati for a total cash consideration of RM43m to repay bank borrowings and for the group's working capital. (The Edge)

Perstima: Takes cautious view on FY2022 outlook. Perusahaan Sadur Timah Malaysia (Perstima), the manufacturer of tinplate and tin free steel, takes on a cautious view on the outlook for the financial year ending March 31, 2022 (FY2022) due to the unprecedented levels of uncertainty and volatility in the market. Managing director Hiroaki Yano said the group expects its business to be supported in FY2022 by a strong balance sheet built over the years and continuous support from customers. (The Edge)

Guan Chong: 2Q net profit falls 36% on weaker cocoa demand and lower margin. Guan Chong reported lower net profit in the 2Q, as sales were affected by the Covid-19 pandemic. Weaker cocoa prices and higher freight cost contributed to the lower margin. Revenue declined 4% to RM876m in the three-month ended June 30 compared with RM910m a year ago. (StarBiz)

MARKET UPDATE

The FBM KLCI might edge higher today after stocks on Wall Street climbed to record highs and commodities rallied on Monday, reversing last week’s losses as the US granted full approval to the BioNTech/Pfizer jab. The S&P 500 advanced 0.9%, with almost three-quarters of the companies in the index rising. Meanwhile, the technology-heavy Nasdaq Composite rose 1.6%. In Europe, France’s Cac 40 closed up 0.9%, the region-wide Stoxx 600 index ended the day up 0.7%, and both Frankfurt’s Dax and the UK’s FTSE 100 were up 0.3%. Oil and other commodity prices bounced back following last week’s sell-off. Brent crude, the international oil benchmark, rose 5.5% to settle at USD68.75 a barrel. The big event for investors this week is the annual central bankers’ symposium at Jackson Hole, Wyoming, starting on Thursday. Interest in the meeting of monetary policymakers has been heightened by disagreements within the Federal Reserve over the speed at which it should trim its purchases of government debt.

Back home, the FBM KLCI extended its gains for a second trading day on Monday as investors cheered the stability of the political landscape following the appointment of the new Prime Minister, Datuk Seri Ismail Sabri Yaakob. At 5pm, the benchmark index closed up 4.4 points or 0.29% at 1,522.43, after trading between 1,519.53 and 1,524.86. Elsewhere in the region, Japan's Nikkei 225 rose 1.78%, South Korea's Kospi advanced 0.97%. In China, Hong Kong’s Hang Seng Index climbed 1.05% and the Shanghai Stock Exchange Composite Index closed up 1.45%.

Source: PublicInvest Research - 24 Aug 2021